M8 Tax-Exempt Organizations

Question 1

• Which type of organization does not have an annual filing requirement (unlike the other tax-exempt org)?
• All others must make ___ for exempt status

Answer 1

501(c)(1)

WRITTEN APPLICATION approved by the IRS

Question 2

Definition. Gross income from any unrelated trade or business regularly carried on minus business deductions

Answer 2

Unrelated Business Income (UBI)

Question 3

Exceptions to UBI?

Answer 3

• work is performed by unpaid workers (volunteers)

- Articles made by disabled persons

Question 4

Type of corporation organized for the exclusive purpose of holding title to the property, collecting income, and turning over the net income to an exempt organization

Answer 4

501(c)(2)

Question 5

Most common type of exempt organization, organized and operated exclusively for religious, charitable, scientific, educational, etc. purposes

Answer 5

501(c)(3)

Question 6

What form is filed to apply for tax-exempt status for a

1) 501(c)(2)
2) 501(c)(3)

Answer 6

c2 = 1024
c3 =1023

c3 most common so comes first

Question 7

Taxation of UBI - exemption amount?

Answer 7

$1,000

Question 8

Definition. Organizations that are usually taxed on gross income less deductions for exempt function income

Answer 8

Membership Organizations (taxable)

Question 9

Tax-Exempt organizations tax return and due date

Answer 9

Form 990

Due May 15

Question 10

990EZ filing requirements

Answer 10

Gross receipts less than $200,000 and total YE assets of less than $500,000

Question 11

Organizations with ___ gross receipts do NOT have to file form 990

Answer 11

less than 50,000

Question 12

Organizations not required to file form 990 (CHRIST)

Answer 12

C = Churches
H = High school - religious
R = Religious Orders
I = Internal support auxiliaries 
S = Societies - missionary related
T = Tax-exempt - organized by Congress

Question 13

How many years failure to file form 990 until tax-exempt status is revoked

Answer 13

3 consecutive years (3 strikes and you’re out)

Question 14

If tax-exempt status revoked, must file ___ and pay ___

• Within ___ months of the auto revocation, organization must complete one or more of the following:
• file all required documents for reinstatement (1023 or 1024)
• File all annual returns that were required and caused revocation
• Submit statement citing reasonable cause for not filing one of the three consecutive years of missed returns

Answer 14

File application, pay user fees

within 15 months